How to Save Your Money for Emergencies in 5 Easy Steps

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We all know we’re supposed to have some money set aside for emergencies.

Unfortunately, finding the money to put into an emergency fund can be difficult. In fact, last year the American Psychological Association pointed out that the number one stressor for people is money.

On top of that, there are reports that the rebounding economy is leaving some folks behind. Even though many stories and statistics proclaim recovery.

No wonder people feel like they can’t figure out how to save money on a tight budget.

However, if you feel totally broke but still want to start a savings habit, it’s not completely impossible.

Why start an emergency fund?

Your emergency fund can help you weather financial setbacks that can turn into real problems later.

Car repairs are typical expenses covered by an emergency fund. I remember one time doing the math for one of them. Did I have enough for a $300 car repair? Not really. So I had to ask myself a few tough questions.

Do I ignore the problem and try to save up? What if that sort of minor issue morphs into a major issue that costs even more by the time I can address it? On the other hand, I’ve just paid down my credit card, and there’s just enough room now to charge the repair.

An emergency fund helps alleviate some of this problem. If you need a $300 car repair, and you have $200 in your emergency fund, you can look for other ways to get that $100. Having an emergency fund makes that gap a little easier to manage.

Building your emergency fund over time makes sense as well. You may even be able to amass two or three weeks (or months) of expenses when you spend enough time saving. This can come in handy if your hours are cut at work or you’re unexpectedly unemployed.

How to save your money

Even if you’re broke, you can still start saving. It’s not always easy to figure out how to save your money, but it is possible. Here are five steps for how to save money when you’re broke:

1. Open an account for savings

The first step is to open an account designated for saving. Just opening an account can help you get in the right mindset for saving.

Look for a financial institution that doesn’t require an account minimum or charge various fees. Many small community banks or credit unions offer savings accounts free of fees.

And while there are lots of places to keep your emergency fund, consider starting with a plain vanilla savings account. No need to get fancy from the get-go.

2. Start small

Many of us may think we don’t have enough money available to set aside to make saving it worth it.

However, you can learn how to save your money even when you’re broke. Any amount is worth putting in an emergency fund. The habit is the important thing.

If you can only set aside one dollar each day, that’s fine. You can put a dollar in a jar each day, and at the end of two weeks or a month, deposit it in the bank. It may seem like a small thing, but the mindset you develop is powerful.

Another strategy is to use the 52-week challenge. During the first week of the year, you set aside a dollar. The next week, you set aside two dollars. You get the idea. By the end of the year, you should have $1,378 in your emergency fund.

The idea is to get in the habit of looking for more ways to save over time. And, keep up with the habit. As your financial situation improves, you can boost your savings as well.

3. Make it automatic

I actually don’t like remembering to transfer money into another account. Or, collecting it to bring to the bank later.

For me, it’s all about the automation. Out of sight, out of mind — and growing my emergency fund over time.

Make it automatic by talking to your employer and seeing if you can have a portion of your paycheck automatically deposited into your savings account. Or, if that’s not an option, set up an automatic transfer each month. Just make sure you coordinate it with your pay day and when your other bills are due.

Another way to make it automatic is to use a savings app like Dobot. These kinds of apps monitor your income and spending patterns. They can also withdraw a small amount of money at a time. Look for an app that guarantees it won’t overdraw your account.

Once you get used to not having the money available to you, you might be surprised at how well you can do without it.

4. Cut more of your spending

Take a look at your spending plan. Are there areas where you can cut back?

Reducing your power consumption can help you save a few bucks on your utilities. So can brown bagging it and taking your lunch to work. Or, cutting entertainment subscriptions like cable.

We all know the drill when it comes to cutting down spending. Just remember to start small with little moves like these.

5. Make more money

Of course, there’s only so much you can cut. Eventually, you’ll reach a point where you just can’t squeeze one more penny out of your budget.

This is when you determine whether or not you might be able to make a little extra money instead.

A good way to start making extra money is by taking a seasonal job or starting a side gig. If you are following a savings plan like the one from Dave Ramsey, you can get to the point of $1,000 in your emergency fund and then cut back on the extra work.

Not everyone has the time or ability to take on more work. But if it’s an option for you, it can be one way to kickstart your emergency fund when you don’t have any extra money to spare.

Do you need financial help?

If you are in a place where you don’t have a dollar a week to spare, you might need financial help.

Consider reaching out to your support system or family for financial aid. Although it may be difficult or uncomfortable at first, there’s no shame in asking for help when you need it the most.

There are also community resources that you might have access to. Accessing local food pantries can help you save money on food. That allows you to then turn around and put that money in your emergency fund instead.

Community programs also often offer financial counselors that can help you review your finances. Then, they can make suggestions for improving your situation.

Additionally, many cities have programs designed to help you pay your utilities. And many religious congregations offer financial aid to members.

Sometimes the help you need isn’t even financial.

I often help my sister by watching her kids so she can work without paying for daycare. My parents took me to the store to buy my first two weeks’ of food and some cleaning supplies after my divorce. They didn’t give me money, but it helped free up my own resources.

Every little bit helps

At the end of the day, your emergency fund is all about helping you manage unexpected (and often unpleasant) financial situations. That’s why it’s so important to access and build upon that mindset of saving.

By learning how to save your money (even when it seems like it’s impossible), you’re one step closer towards peace of mind and financial stability when times get tough.

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.